Final answer:
The total public debt represents the total amount of money owed by the federal government to holders of U.S. government securities such as Treasury bonds, notes, and bills. Each year, the government borrows funds from U.S. citizens and foreigners by selling these securities to cover its budget deficits.
Step-by-step explanation:
The total public debt represents the total amount of money owed by the federal government to holders of U.S. government securities such as Treasury bonds, notes, and bills. Each year, the government borrows funds from U.S. citizens and foreigners by selling these securities to cover its budget deficits. The government promises to repay these loans with interest in the future.
While the debt owed by the government to itself does not have the same impact as private debt, the debt owed to foreigners represents a loss of purchasing power as the money is diverted from the U.S. economy.